Low Profile No More?
Resource (In) Security
and Chinese World Views
Shaun Breslin - University of
Warwick
韬光养晦
Hide brightness and nourish obscurity
Hide capabilities, bide our time and accomplish some things
Xiong Guangkai – deliberately mis-translated by people with a Cold War
mentality
Countering or reinforcing the “China Threat Thesis”?
Who Speaks for China?
Yang Jiechi on the China
Dream
“Comrade Xi Jinping's comprehensive, profound and exquisite description of
the Chinese dream”
“Developing a G2 relationship without abandoning the rest of the world”
equality, justice and mutual benefit
“The Great renewal of the Chinese nation”
“a continuation and development of the important thinking of China's peaceful
development”
“attempts by certain international forces at distorting and smearing the
Chinese dream”
Investment Projects blocked
through security concerns
2005 China National Offshore Oil Corporation and Unocal
2008 Huawei and 3Com
2009 China Northwest Nonferrous International Investment Company
and Firstgold
2010 Anshan Iron and Steel Group and the Steel Development
Company
2012 Huawei again in Aistralia
Development of overseas resource development plan in 2001
Around 180 projects in 37 different countries
State Owned National oil company is dominant actor
acquired UK, Russian and Canadian companies
including “hostile” take-overs
Export-Import bank acts as state credit agency to support overseas
investments
Active energy diplomacy by the President – 11 MOUS with energy producing
countries. Particularly keen to benefit from changed political situation in Iraq
Expansion into land leases and purchases
even leading to a coup in Madagascar in 2009
China, Resources and not quite yet the End of “The End of
History”?
Barma and Ratner 2006
“[China] could set scores of developing nations away from the path of liberal
democracy, creating a community of countries that reject Western views of human
rights and accepted standards of national governance”
•undermine the liberal West’s attempts to use sanctions to promote political change in
“rogue states” like the Sudan, Burma and Zimbabwe
•bolster authoritarian regimes that the West is trying to persuade to move towards more
democratic political systems
•undermine attempts to encourage the promotion of Human Rights and more tolerant
political cultures in existing (imperfect) democracies
•encourage existing democratic governments to move towards more authoritarian forms
of politics
•bolster socialist/proto-socialist democratic governments – some of whom are hostile to
the interests of the West/US
•undermine the promotion of (neo)liberal economic paradigms and reinforces the
appeal of strong state
External Conceptions of China’s Global (Energy) Role
China and the price and distribution of global resources
China as new (and big) market player
China as predatory market player
state companies and national objectives
China as system shaper?
China and the global liberal order
shoring up rogue states
alternative partner
alternative model?
Changing patters of power and the global financial crisis
Sea lanes and communications and controlling global supplies
China’s territorial claims in South China Seas and elswhere
Pak “oil (wars) in the pipleline?”
Sources of supplies ?
1993 – major suppliers were Oman, Indonesia, Yemen and Angola (c70%)
2003 – Saudi Arabia, Iran, Angola, Oman, Yemen and Sudan (c75%)
2011 - Saudi Arabia (20%), Angola (12), Iran (11), Oman (7), Russia (7), Sudan
(5), Iraq (5), Venezuela (4), Kazakhstan (3.5), Kuwait (3)
Zha Daojiong - Self sufficiency and insecurity
Phase One – neither sufficient nor secure, 1949-63
Phase Two – sufficient but insecure, 1963-mid 1970s
Phase Three – declining self sufficiency, increasingly secure, mid-1970s-1993
oil imports start from Oman, 1983
net importer of oil, 1993 (petroleum, 1996)
Phase Four – not sufficient not insecure, but getting concerned1993-2000ish
Changing conceptions of security
from geostrategic to geo-economic
Oil demand increases
Phase Five, not sufficient and growing concerns, 2000regime legitimacy and “dependence” on the capitalist global economy
Changing conceptions of energy security
sustainability of coal driven economy
economically and environmentally
1999-2000, Brent US$10.44 per barrel to US$25.10
1999-2000, Chinese net oil imports from US$3,876mn to
US$12,733
“old” security concerns in Africa and Middle East
currency policy and the dollar “peg”
China as a late comer into an existing energy economy
Dominance of US and Western interests
The Domestic Context
Coal is still be far the most important source of energy
2009 – becomes net coal importer (but less than 10 per cent of total use)
primarily due to quality and distribution bottlenecks
Efficiency and usage
energy per $ produced decreasing again after increasing as a
consequence of post-crisis stimulus
(a) still high(ish) in international comparison
(b) varies greatly between places and types of activity
Refining capacity and technical ability – need for “light and sweet” oil
Nuclear power and clean power account for 1% and 8% of China's total
power generation respectively
the green agenda (and the decline of suntech)
The distribution of power within China
competitive provincial growth strategies and “irrational” resource
utilisation
exacerbated by response to the global crisis
But “Going Global” is clearly
important
SOURCE: Center for
American Progress at
http://www.americanprogre
ss.org/issues/2010/04/china
_oil_map.html
A state led project to dominate global energy supplies?
BUT …..
New actors - local companies, private operators
Role of Competition BETWEEN Chinese SOEs in overseas markets
as well as increasingly at home
Downs, Brautigam and others – companies take the lead and have
operational autonomy
Increased autonomy due to financial resources, globalised
management, seeking advice and funds from global sources
Many energy related projects do not have direct energy provision
consequences for China
commercial projects (often with state help) to make money
with development consequences for the partner
eg: Upgrading electricity generation in Malawi
Mayer and Wubbeke
overseas oil assets c.30% of net imports
Jiang and Sinton for International Energy Agency
c.36% in first half of 2010
But “most” (?) simply sold into global markets rather than going straight
back to China
“almost all the equity production Chinese NOCs have in the Americas was
sold locally instead of being shipped back to China (FACTS Global
Energy, 2010). Considering geographical distances, it is more costly to
ship that oil to China. Additionally, Venezuelan heavy crude is not
compatible with existing Chinese refining capacities.”
Some Conclusions
(1) Important to separate out different actors, interests and voices
the geostrategic state project from other objectives
(2) Towards a liberal energy peace?
• US naval hegemony and stable oil supplies
• the USA is the country with which China has launched the largest number of
collaborative energy development programmes and projects
• energy policy a key agenda item in bilateral dialogues – not just specific energy
related fora (US-China Energy Policy Dialogue, the US-China Oil and Gas Industry
Forum, the Peaceful Uses of Nuclear Technologies Agreement), but in broader
areas of discussion as well (the US-China Economic Development and Reform
Dialogue, the Joint Co-ordinating Committee on Science and Technology, and the
US-China Strategic Economic Dialogue)
• Need for imported oil (and oil that China can refined) requires a peaceful and
stable international environment
• China, economic interests, and intervention in Libya
(3) But easily become politicised
perceptions of insecurity remain strong
Why is the US surrounding China ?
East Asia as a bellwether for China as a global
power
(4) Wei Zonglei and Fu Yu
China’s four different simultaneous identities
(5) Chinese world view
dissatisfied responsible great power